The process of renegotiating the UK's relationship with Brussels has not yet started, but this week's visit of German chancellor Angela Merkel will form part of the effort to reform the European Union, William Hague said.

The Foreign Secretary acknowledged that Germany was the "most important partner" on seeking EU reform because of its economic strength and key role in the eurozone.

Mrs Merkel will address both Houses of Parliament during her high-profile visit on Thursday, and David Cameron is expected to raise the issue of overhauling the EU's immigration rules to tackle benefit tourism with the German leader.

Mr Hague told BBC1's Andrew Marr Show: " She knows, and I believe she understands, what our Prime Minister David Cameron has been putting forward, that this is the age - the 21st century is the age - of flexibility, accountability and competitiveness.

"And the European Union cannot be immune from those things. In every nation state we are having to adapt to those pressures and it's very important the EU does so as well.

"So we will be discussing the ideas that we have in common and, as you know, it's our intention after the next general election to improve Britain's relationship with the European Union, to renegotiate the relationship between Britain and the EU and improve the EU along the lines I have spoken so we can give people a choice in a referendum by the end of 2017 about staying in or leaving the European Union."

Asked whether reform of the free movement rules would be on the agenda, Mr Hague said: "I' m sure these subjects will come up. Germany also has strict benefit rules, Germany does not want its benefits system to be abused.

"We support the principle of the free movement of workers, and many British people have rightly taken advantage of that in the rest of Europe.

"But we don't support people moving from one country to another because of the incentives of different benefit systems.

"With Germany we have a lot of common ground on that and there will be no problem discussing that."

The tone of the visit will be in marked contrast to the meeting between the Prime Minister and Francois Hollande at RAF Brize Norton last month, where the two leaders discussed EU reform over a pub lunch following a summit overshadowed by questions about the French president's private life.

Mr Hague said: "This is a different sort of visit from the French visit in January, that was a short summit to discuss our bilateral defence and security co-operation.

"This is a more wide-ranging visit from Angela Merkel.

"Germany is our most important partner on seeking reform in the European Union because it's Germany that has such a strong position in the eurozone, that has managed to maintain a dynamic economy itself. Germany is in that key position in the European Union.

"Our relations with Germany are very important, our relations with Angela Merkel are very good and we want, together, to make sure that Europe is more competitive, more flexible, more democratically accountable than it is today.

"Those are the sorts of ideas we will be discussing with chancellor Merkel."

Asked whether the process of renegotiating the UK's ties with Brussels had begun, Mr Hague said: "The negotiation of the changes that I'm talking about is for after the next general election.

"But we are establishing the common ground with Germany, with the Netherlands, for instance, where their government has issued a report talking about 'Europe where necessary, but national wherever possible'. That is a good guiding thought and it's one on which we can work with the Dutch."

Mr Hague added: " People will have the choice and that negotiation will have to take place. The changes that we need to see are serious and very important for this country's future."

He said the Dutch were "important allies" but "not the only ones" for the UK, with a "strong overlap of ideas" with Germany and support in the Nordic countries.

"I think the time is coming in Europe to push these ideas of flexibility, accountability and competitiveness," he said.

European trade commissioner Karel de Gucht said it would be a "big mistake" for the UK to leave the EU.

With the prospect of a major EU-US trade agreement, he was asked on Sky News' Murnaghan programme whether the UK would be mad to leave. He said: " I would never say of a member state that it is mad but I think they would make a big mistake because this kind of trade deal, I am pretty sure about it, you can only negotiate them between big blocs.

"They are extremely complicated agreements and they are not only on say the traditional stuff like tariffs and public procurement but the bigger part of it, the big chunk is about regulation and that you can only do between big blocs because it is tremendously complicated and how could a country accommodate its regulation with several smaller or medium sized countries, it is impossible.

"You have to go to a standard and that standard we are now trying to establish between the EU and the US."